Climate financing key to achieving an agreement in Copenhagen on international aviation emissions reductions

Climate financing key to achieving an agreement in Copenhagen on international aviation emissions reductions | COP15,UNFCCC

Sun 6 Dec 2009 – With two weeks of talks and negotiations starting tomorrow at the UN Climate Change summit in Copenhagen, lobbyists from both the aviation industry and international non-governmental organizations (NGOs) will separately be pressing developing countries of the need to reduce international aviation emissions through a global sectoral approach. For the first time since the Kyoto Protocol was signed in 1997, Copenhagen presents a real opportunity for the sector’s emissions to be finally included in a global agreement. In order to reach a deal on the wider stage, the developed nations will be required to dig deep into their pockets to help the developing nations mitigate and adapt to the effects of climate change caused by man-made greenhouse gas emissions and they will look to industries such as aviation to help finance the promised funding.

The International Civil Aviation Organization (ICAO) – along with sister UN agency the International Maritime Organization (IMO) – was tasked after Kyoto with coming up with a framework to reduce international emissions (so-called bunker emissions) that could not be attributed domestically. During the intervening 12 years, the 190+ member states of both agencies have failed to agree on binding targets, although each has claimed recent breakthroughs in agreeing goals to reduce emissions.
At its High-Level Meeting (HLM) in October, ICAO member states agreed that the international aviation sector should be subject to an annual 2% fuel efficiency goal to 2050 but this fell short of a binding target. In the minds of many, this represented little more than ‘business as usual’ and would not deal with the emissions rise caused by a projected annual increase of 5% in air traffic over the same period – the ‘mitigation gap’.
Dissatisfaction by Europe over the failure by ICAO to address international emissions has led to the inclusion of all aircraft operators flying in and out of Europe into the EU Emissions Trading Scheme from 2012. With the reporting process now underway, air carriers have already had a taste of the financial and administrative obligations posed by the scheme. Similar trading schemes have been proposed in other developed countries and there is the strong possibility of US aviation facing the consequences of its own cap-and-trade system. Faced with a potential ‘patchwork’ of different national and regional schemes, along with a proposal from small island developing states for an levy on international air passenger tickets, the aviation industry has thrown its weight behind a global sectoral approach, under which only one scheme – administered by ICAO – would prevail.
Under the leadership of the International Air Transport Association, the industry took a pledge around six months ago to achieve carbon neutral growth from 2020 and cut emissions in half by 2050. However, it failed to win over the major developing nations such as China and India at the ICAO HLM, who saw it as infringing the jealously-guarded climate change principle of Common But Differentiated Responsibilities (CBDR).
 IATA CEO Giovanni Bisignani has since engaged in a round of international shuttle diplomacy ahead of Copenhagen to seek support for the industry proposals – taking in China, Russia and India along the way, as well as meetings with UN Secretary-General Ban Ki-moon and the Chairman of the UN Intergovernmental Panel on Climate Change, Dr Rajendra Pachauri.
“They all held aviation up as a model for an industry response to climate change,” claimed Bisignani in a lecture in Montreal last week. “They were particularly interested in how we are bridging the gap between developed and developing nations under ICAO’s leadership. We did it with engine noise reduction and we will find a way with emissions. By continuing to cooperate I am convinced that aviation will secure an environmentally responsible future regardless of politics.”
NGOs and many developed countries, including Europe, support the concept of international aviation (along with shipping) being treated sectorally – much like a country, with its own emissions reductions targets and a carbon trading market – but for different reasons.
A key issue of the Copenhagen talks will be a requirement by developed countries to finance climate change adaptation and mitigation measures in the less developed world. Europe foresees that around $100 billion a year will be needed to secure a global deal. Given the leading world economies have just gone through the worst financial crisis in living memory, it’s a moot point as to where that money will come from.
With continuing strong underlying forecasted growth in traffic and therefore emissions, along with enjoying the privilege of untaxed fuel, international aviation and shipping are seen as potential ‘cash cows’. The European Commission estimates that the two sectors could generate €17-25 billion ($25-37 billion) annually by 2020, in the case where 100% of emissions allowances were auctioned under a global carbon trading scheme. Oxfam has estimated that annual auction revenues from aviation and shipping measures could exceed $12 billion and $16.6 billion respectively at an allowance price of $45 per ton.
“The potential annual revenues from economic measures to control bunker emissions are very substantial and represent a significant proportion of the developing world’s overall needs to finance climate mitigation, adaptation and R&D,” says Bill Hemmings of Transport & Environment (T&E), which will be amongst 10 NGOs in Copenhagen seeking to convince both Annex 1 (developed) and developing countries of the urgent need to reduce bunker fuel emissions.
“Climate financing seems to be the key to unlock the political deadlock between the need for effective global mitigation measures involving all operators (reflecting ICAO and IMO principles), which is also the only way to avoid competitive distortions and the United Nations Framework Convention on Climate Change (UNFCCC) CBDR principle, which has the burden of mitigation action falling on developed countries.
“Developed countries need to do more to recognize the role that bunker finance sources can play in reaching an overall agreement at Copenhagen. And developing countries have the opportunity that in return for agreeing to set global targets for these two very special emitting sectors, as well as global market-based measures to mitigate emissions, the financial return for developing countries is very substantial – not only to cover any incremental costs created by the measures themselves, but creating a large and ongoing source of financial support that can be a critical element in their own fight against the effects of climate change.”
Hemmings concedes that the impact on airline ticket prices will not be negligible but believes it is “manageable”. To allay the fears of developing countries that rely on tourism and international trade, a coalition of NGOs, including T&E, proposes that traffic on routes to and from the least developed countries should be exempted, with provisions to deal with the issue of carbon leakage.
Tim Johnson of the Aviation Environment Federation says that although guaranteed finance for developing countries was important, the real issue was in setting an appropriate target for emissions reductions for the aviation sector.
“In so far as Copenhagen can make political progress on a new climate change agreement, then it is vital that aviation is included in the framework,” he adds. “Early agreement by UNFCCC on a target for the sector would define the appropriate ambition and timetable necessary to guide ICAO in developing appropriate global measures. With a target in place, we would expect ICAO to be in a position to report on an effective strategy by its next Assembly in autumn 2010.”   
Unsurprisingly, Hemmings is highly critical of the track record of the aviation and shipping sectors on emissions reductions. “Bunkers are on the Copenhagen agenda now because IMO and ICAO in particular have failed to live up to their Kyoto responsibilities,” he says.
“The IATA proposal of carbon neutral growth by 2020, 11 years from now, which gives industry a free ticket to emit uncontrolled for another decade is an affront to mankind. That is why Copenhagen has to step in and do the job that ICAO and IMO have proven incapable of. Copenhagen must set the framework for future detailed work. A clear signal that emissions must start to reduce, setting the parameters and placing strict timelines and guidelines around what measures, and by when, are required to achieve these reductions.
“Aviation is a wonderful industry, critical to the way the world economy operates and a means to bring humankind together. But those currently holding responsibility for managing its response to global warming are failing spectacularly and each day this continues, progressively putting the whole future of the industry as well as of the planet, in jeopardy.”
ICAO will be presenting the Programme of Action agreed at its High-Level Meeting during the Copenhagen negotiations and will hold a side event on Tuesday, 8 December. No details have been forthcoming of which ICAO officials will be attending, although the agency will be represented by Jane Hupe, Chief of the Environmental Unit.
IATA’s Giovanni Bisignani will speak at the ICAO side event and the aviation industry will be represented during the two weeks of the conference by Paul Steele, Director for Aviation Environment at IATA. Steele will head a delegation of industry executives attending from member airlines and regional associations, as well as representatives from airports, air navigation service providers and aerospace manufacturers.
“We attended the previous UNFCCC meeting in Barcelona where we talked to delegates and attended side events and meetings, and we will be taking a similar approach to Copenhagen,” says IATA’s Quentin Browell.
“Our task is to make sure delegates are well informed about aviation and the environment and that they are aware of the industry positions. We are calling for a global sectoral approach for aviation emissions to avoid a patchwork of overlapping regional and national policies. We will also be bringing our three targets to Copenhagen.
“As well as the ICAO event, we will be taking part in a number of others as well. The programme at these meetings is always fairly fluid so we will be flexible about what we attend. We are not planning an IATA side event at this stage, but we may organize one if we think it is worthwhile.”
Haldane Dodd, Head of Communications of the Air Transport Action Group (ATAG), which promotes sustainable issues for all sectors of the air transport industry, will be regularly blogging and tweeting from Copenhagen on the website for the two-week duration.
During the UNFCCC Conference of the Parties (COP) 15 meeting, aviation and marine bunker fuel emissions will be covered by the 8th Session of the Ad Hoc Working Group on Long-Term Cooperative Action under the Convention (AWG-LCA). A sub-group, which is considering cooperative sectoral approaches and sector-specific actions, will continue its deliberations on various options tabled at last month’s UNFCCC talks in Barcelona (see documentation).
According to Damian Ryan of The Climate Group, achieving a breakthrough on international aviation emissions reductions will not be possible without a wider binding global deal in Copenhagen. The international NGO has been advising the Aviation Global Deal group of airlines that was formed earlier this year to help formulate ambitious policy proposals in preparation for Copenhagen. It has also been involved since March 2008 in a joint initiative with former UK Prime Minister Tony Blair, called Breaking the Deadlock, which has been helping build support for a Copenhagen agreement.
Deadlock or success, Copenhagen is unlikely to be the end of the road in the 12-year trek to bring the sector’s international emissions into the global climate change framework. But it could mark the start of a new beginning.
Update  Mon 7 Dec:
ICAO will be presenting a video – Uniting Aviation on Climate Change – at its side event in Copenhagen tomorrow, which can be viewed here



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